The US says China is on the monitor list as are 5 other countries. Trump’s Tariffs attack a symptom, not the problem.
Inquiring minds are digging into the 34-page US Treasury report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States.
There are three criteria, all of which much be met, to label a country a currency manipulator. Five countries meet 2 of 3 requirements. China meets only 1 but is still signaled out in the report.
The three conditions are defined in the Trade Facilitation and Trade Enforcement Act of 2015.
Conditions
A a significant bilateral trade surplus with the United States is one that is at least $20 billion
A material current account surplus is one that is at least 3 percent of gross domestic product (GDP)
Persistent, one-sided intervention occurs when net purchases of foreign currency are conducted repeatedly and total at least 2 percent of an economy’s GDP over a 12-month period
Monitor List
China, Japan, Korea, India, Germany, and Switzerland
Report Findings
Five major trading partners of the United States met two of the three criteria for enhanced analysis in this Report or in the April 2018 Report.
One major trading partner, China, constitutes a disproportionate share of the overall U.S. trade deficit.
Japan, Germany, and Korea have met two of the three criteria in every Report since the April 2016 Report having material current account surpluses combined with significant bilateral trade surpluses with the United States.
Switzerland met two of the three criteria in every Report between October 2016 and April 2018 – having a material current account surplus and having engaged in persistent, one-sided intervention in foreign exchange markets – and it met one of the three criteria in this Report, a material current account surplus.
India met two of the three criteria in the April 2018 Report – having a significant bilateral surplus with the United States and having engaged in persistent, one-sided intervention in foreign exchange markets – and it met one of the three criteria in this Report, a significant bilateral surplus with the United States.
China has met one of the three criteria in every Report since the October 2016 Report, having a significant bilateral trade surplus with the United States, with this surplus accounting for a disproportionate share of the overall U.S. trade deficit. Treasury will closely monitor and assess the economic trends and foreign exchange policies of each of these economies.
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